Reminder Regarding Observation Room Services

Observation room services are covered when they are determined to be medically necessary per the criteria outlined in Blue Cross and Blue Shield of North Carolina’s (BCBSNC) medical policies for commercial plans and Blue Medicare HMOSM and Blue Medicare PPOSM Medicare Advantage plans. As a reminder and to ensure compliance with BCBSNC billing requirements for observation room services, you are encouraged to review BCBSNC related medical policies noted below. Additionally, you are encouraged to review your facility’s related contract provisions.

Specifically, we’d like to remind hospitals/facilities of the following guidelines:

BCBSNC commercial contracts state the allowed amount for any observation stay exceeding 24 hours (not to exceed 48 hours as defined by the medical policy below) will be the lesser of the applicable inpatient or outpatient allowed amount.

Both the BCBSNC provider Blue BookSMand the Blue Book Supplemental Guide state that charges related to an observation bed may not exceed the prevalent semi-private daily room rate.

BCBSNC provides coverage for observation room services when they are determined to be medically necessary per the criteria outlined in these related medical policies: